Record revenues as RWC seeks new frontiers

5:08 pm on 17 September 2015

The Rugby World Cup has become a huge business machine generating record revenues this year and aiming for even more in the future.

World Rugby is targeting commercial revenues of £240 million ($NZ580 million) for the tournament which starts at Twickenham on Saturday morning, 60 percent higher than 2011, according to chief executive Brett Gosper.

The Webb Ellis Trophy

The Webb Ellis trophy Photo: Supplied: RWC

He predicted a surplus of about £150 million ($NZ362 million).

Some business experts reckon the World Cup generates $1 billion for the global body, broadcasters, kit makers and sponsors.

On top of the World Cup's revenues, the 20 competing countries, are bringing £125 million ($191 million) in sponsorship deals alone, according to the Repucom sports marketing data firm.

The World Cup is "a massive commercial platform," Repucom chief executive Paul Smith said. "It is a billion dollar enterprise drawing investment on many levels."

Television accounts for about two thirds of World Rugby's revenues, said Gosper. It is also leading rugby's attempts to conquer new markets.

The World Cup will be shown broadcast in 203 countries and territories. Germany will show 24 matches live and China 22, Gosper said.

"We want maximum exposure, particular in markets like India, China, Brazil and the United States," he added.

No shortage of hosts

The World Cup was first held in 1987 in Australia and New Zealand, but only became "truly global" in 2003 when it returned to Australia and was won by England, said Smith.

"It has been a slow building exercise," said Smith, while adding that it has major potential for growth.

Rugby fans are traditionally wealthier than football counterparts. The sport also has longstanding sponsors in finance like Societe Generale bank in France and US insurance giant AIG in New Zealand.

"It reaches so many corners of the world and of course as an Olympic sport now through sevens, it amplifies the whole importance of the game," said Smith.

"Lots of investment is going to come into rugby now in countries that haven't previously been fully participating in the game," he added.

World Rugby is hoping that the sport's Olympic rebirth in Rio de Janeiro next year will further boost finances and encourage new male and female players.

"Rugby has got to pursue those major corridors for development. The United States is key for that," said Repucom's Smith.

"It is a major population market. It's a very lucrative commercial market and of course it is a very lucrative broadcast market."

The proof of rugby's golden future may be that the United States considered bidding for the 2023 World Cup for which expressions of interest had to be entered by July. There is no shortage of countries willing to spend big to host the event even though Rugby World had problems when 2019 hosts Japan decided not to build a $2.1 billion national stadium.

The US decision to stay on the sidelines left Ireland, France, Italy and South Africa in contention for 2023 which will be decided in two years.

And victory in the 2015 tournament will certainly bring new riches to that country. New Zealand's All Blacks are the favourites and a third triumph would increase their value as an international rugby icon.

"Globally they are acknowledged as one of the great sporting brands," said Smith. "I wouldn't even describe them as a franchise. It is a money can't buy sort of deal."

New Zealand's size mean they do not draw the amount of revenue they could do if they were a bigger country, experts say.

England's Rugby Football Union "do a great job" attracting money, according to Smith. The RFU says it made revenues of more than £150 million for 2013/14 and put a record £75 million back into the game.

France has the biggest spending clubs - the Top 14 championship have a joint budget of more than 300 million euros for this season, drawing top players from around the world.

-AFP